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Loan Programs
- SBA 7(a) Guaranteed Loan
- SBA 504 Loan Program
- USDA Business and Industry
- Tax Abatement / Rebate
- Minnesota Investment Fund
- Small Business Development
- Big Lake SAC / WAC Incentive
- Agency: Small Business Administration
- Contact: Alisha Podobinski
Phone: 612-370-2331
The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA (up to 85% of loan) -- the Agency has no funds for direct lending or grants. A maximum loan amount of $5 million has been established. However, the maximum guaranty is generally $13.75 million. Use of proceeds: purchase of real estate, construction, renovation or leasehold improvements, acquisition of furniture, fixtures, machinery and equipment; purchase of inventory and working capital.
| Term | Fees | Interest |
| Twenty-five (25) years for real estate and equipment; and, generally seven (7) years for working capital. | $0 to $150,000 loan: 2% of guaranty.$150,001 to $700,000 3% of guaranty. $700,000 to $1,00,000 3.5% of guaranty. $1,000,000 plus additional 0.25 % | $50,000 plus loan - maximum prime plus 2.25% (2.75% if 7 plus years). $25 to $50,000 - maximum prime plus 3.25% (3.75% if 7 plus years). $0 to $25,000 - maximum. prime plus 4.25% (4.75 if 7 plus years). |
Interest Type
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed / variable | Maximum Loan $5,000,000 | Determined by four factors:
|
- Agency: Central Minnesota Development Company (CMDC),
- Contact:
Email Kevin Weeres
Phone:763-784-3337
SBA provides subordinate, second mortgage financing to be combined with bank financing of fixed assets.
| Term | Fees | Interest |
| 10 and 20 year terms | Approximately 3% of debenture. | Pegged to an increment above 5 and 10 year US Treasury Issues. |
Interest Type
| Interest Type | Amount | Eligibility/Requirements |
| Fixed | Up to $5,500,000 | 10% equity. For profit business. |
USDA Business and Industry Loan Guarantees
- Agency: U.S Department of Agriculture
- Contact: David Gaffaney
Phone: 651-602-7814
Since Sherburne is a rural county, its businesses are eligible for loan guarantees from the United States Department of Agriculture (USDA). USDA guarantees loans 80% up to $5,000,000, 70% up to $10,000,000 and 60% over $10 million.
| Term | Fees | Interest |
| 1 to 30 years | Annual renewal fee | Set by primary lender. |
Interest Type
| Interest Type | Amount | Eligibility/Requirements |
| Fixed / variable | Up to $40 million | 10% to 20% equity depending on if it is a new or existing business. Must be located in rural area - area less than 50,000 in population. |
Tax Abatement Financing, Tax Rebate Financing
- Agency: City of Big Lake
- Contact: Hanna Klimmek
Phone: 763-251-2979
The Minnesota State Legislature created Tax Abatement Financing as a locally controlled source of financing.
The Big Lake EDA / Big Lake City Council must find that Tax Abatement Financing is in the public interest because the tax abatement will meet at least one of the following criteria:
- Increase or preserve tax base
- Provide employment opportunities in the City
- Provide or help acquire or construct public facilities
- Help redevelop or renew blighted areas
- Help provide access to services for the City's residents
- Finance or provide public infrastructure
- Stabilize the tax base through equalization of property tax revenues with respect to utility property, both real and personal
The amount and term of the abatement is determined by the Big Lake EDA / Big Lake City Council based on City policies and an application. For additional detail and a copy of the City's Tax Abatement Policy and application, please contact Hanna Klimmek, Community Development Director.
- Agency:
Department of Employment and Economic Development - Contact:
- Steve Sussman
Phone: 651-297-1164 - Carol Presley-Olson
Phone: 651-296-3898
- Steve Sussman
To create new and retain the highest quality jobs possible on a state wide basis with a focus on industrial, manufacturing and technology related industries; to increase the local and state tax base and improve the economic vitality for all Minnesota citizens. Loans for land, buildings, equipment and training are eligible. Funds may also be used for infrastructure improvements necessary to support businesses located or intending to locate in Minnesota.
| Term | Fees | Interest |
| Real estate a maximum of 20 years; machinery and equipment a maximum of 10 years. | Negotiated | Negotiated |
Interest Type
| Interest Type | Amount |
| Negotiated | $500,00 |
Eligibility / Requirements
Cities, counties, townships and recognized Indian tribal governments. Minimum Requirements. All projects must meet minimum criteria for private investment, number of jobs created or retained and wage thresholds. Other Funds Required. At least 50% of total project costs must be privately financed through owner equity and other lending sources. Most applications selected for funding have at least 70% private financing.
Small Business Development Loan
- Agency: Department of Employment and Economic Development
- Contact:
- Steve Sussman
Phone:651-297-1164 - Carol Presley-Olson
Phone: 651-296-3898
- Steve Sussman
The Minnesota Agricultural and Economic Development Board (MAEDB) makes small business loans through the issuance of industrial development bonds backed by a state-funded reserve of 25%. Acquisition of land, building, machinery and equipment; building construction and renovations; development costs such as engineering, legal and financial fees. Working capital and refinancing are not eligible.
| Term | Fees | Interest |
| Real estate at maximum of 20 years; equipment at 10 years or 80% of useful life. | Bond issuance costs of 4% are capitalized with the loan principal. Ten percent of bond issue must be escrowed. | Market rate of interest for similar securities at the time bonds are sold |
Interest Type
| Interest Type | Amount |
| Fixed | $500,000 minimum - $6 Million maximum |
Eligibility / Requirements
Generally, 20% of the project costs must be privately financed through equity or other sources; 25% is required on equipment transactions. Manufacturing and industrial businesses located or intending to locate in Minnesota, as defined by Small Business Administration size and eligibility standards; generally, those with 500 employees or fewer. New capital investment resulting in a significant number of new jobs and other beneficial economic impacts.
Big Lake offers a SAC/WAC Payment Incentive Program.
- Business Loans
- Seed Investment
- Technology Capital Fund
- Environmental Improvement Loan
- Property Assessed Clean Energy
- EDA Revolving Loan Fund Prog.
- Agency: Initiative Foundation
- Contact: Dan Bullert, Business Finance Officer
Phone: 320-632-9255
The Initiative Foundation offers the following business financing programs to meet diverse regional needs:
- Direct Business Loan Fund - up to $250,000 for value-added agriculture and manufacturing companies that bring new revenue to communities.
- Technology Capital Fund - up to $500,000 for emerging high-tech ventures and technologies that increase productivity.
- Green Business Loan Fund - up to $250,000 for businesses that preserve the environment, reduce energy demands or recycle existing waste streams.
- Nonprofit Loan Fund - up to $50,000 for the creation or expansion of mission-related earned-income/social enterprise activities carried out by eligible nonprofit organizations. Loan proceeds may be used for working capital, equipment acquisition and/or facility improvements.
- Lender Match Loan Fund - up to $50,000 for manufacturing, technology, wholesale and other businesses. In partnership with financial institutions, this fund provides crucial capital to minimize the out-of-pocket cash outlay otherwise needed for a down payment on the purchase of equipment or real estate.
The Initiative Foundation places an emphasis on technology-based and green businesses as well as value-added manufacturing and agriculture operations. Nontraditional business owners such as women and minorities are especially encouraged to apply. Business loans are competitive and subject to review by staff and a volunteer committee. Loans may require 90 days to review and close based on complexity and documentation.
- Agency: Initiative Foundation
- Contact: Paul Kleinwachter
Phone: 320-631-2009
The purpose of the Seed Fund is to promote the entrepreneurial culture within Central Minnesota and promote the capacity of manufacturing or technology-related companies to grow. Eligible uses of funds include the development of new products or technologies including:
- Product research and development.
- Working capital to develop new product(s).
- Market research and development of new product(s).
- Prototype development and testing.
- Other related uses deemed appropriate by the Central Minnesota Seed Fund.
| Term | Fees | Interest |
| n/a | 1% origination fee | n/a |
Interest Type
| Interest Type | Amount |
| n/a | maximum is $50,000 |
Eligibility / Requirements
Project funding requires a minimum of a 1:1 equity or cash match dollar for every dollar of Seed Fund investments. Eligible participants include individuals, small and medium size businesses located in the 14 counties served by the Initiative Foundation and the St. Cloud Regional Office of Minnesota Technology.
- Agency: Initiative Foundation
Supports emerging technology ventures and helps established companies integrate proven productivity applications into their business operations and process. Eligible investments: Operating capital, Fixed Assets, land and buildings, Construction and leasehold improvements, Machinery and equipment for high-volume productivity or high margin applications, Commercialization of new product launch and marketing, Productivity and process-enhancing software systems.
| Term | Fees | Interest |
| Varies | Up to 2% origination fee, legal fees associated with documenting and closing the investment. | Varies |
Interest Type
| Interest Type | Amount |
| Varies | $500,000 |
Eligibility / Requirements
Demonstrated management skills, industry experience and financial controls. A sound business plan with financial projections. Due diligence in product and technology validations. Outside assessment of business and marketing plan (if deemed necessary). Creation of living wage jobs with broad employee benefits.
- Agency: Minnesota Pollution Control Agency
- Contact: Mike Nelson
Phone: 651-757-2121 or 800-985-4247 (within Minnesota)
Loans for environmental improvement projects such as site clean-ups or equipment purchases exceeding environmental regulations.
| Term | Fees | Interest |
| 7 years | n/a | 4% or half prime rate, whichever is greater. |
Interest Type
| Interest Type | Amount | Eligibility/Requirements |
| Fixed | $50,000 | Must have less than 50 employee, net worth less than $1,000,000, and an after-tax profit of less than $1,000,000. |
- Agency: Sherburne County
- Contact: Dan Weber, email, 763-765-3007
- Application
- Checklist
Eligible Uses of the Revolving Loan Fund
- Land and Building Acquisition
- Land Improvements
- New Building Construction
- Building Renovation and Modernization
- Machinery, Equipment & Fixtures - the remaining effective life must be equal to or exceed the life of the loan.
Ineligible Uses of the Revolving Loan Fund
- Debt Refinancing
- Working Capital
- Residential Real Estate
- Taxes
- Professional Fees
- Gambling, Religious, Political or Adult/Pornographic Businesses
Amount Available
Applications will be accepted for loan amounts ranging from $25,000 up to $100,000. Amounts available to applicants under this Program are determined based on an evaluation of positive economic impact and the number of full time (or full time equivalent) non-seasonal jobs that the organization will maintain or create within Sherburne County.
Administration
Application forms are available on line or can be received from Sherburne County Government Center; Administration Office. A completed loan application must be submitted to the County Administration Office.
Applicant should allow a minimum of four to six weeks for processing once the completed application and all required documentation are submitted. County Administration will assist the applicant through all stages of the application process. County Administration, in consultation with the a third party vendor, will review the loan request utilizing financial industry standards including, but not limited to, determining the following:
- Applicant is credit worthy
- Applicant can show lender commitments
- Applicant is willing to sign a personal guarantee
- Applicant can pledge adequate collateral
- Applicant can inject a minimum of 5% equity
- Applicant can demonstrate project feasibility (demonstrated cash flow projections, business plan, etc.)
- Applicant must owner occupy a minimum 51% of a building project
An initial meeting with the Applicant and the primary lender will be set up with County Administration and/or CMDC Business Financing. If the application meets the initial policy guidelines, County Administration will forward the completed application to the CMDC Business Financing for review. Following the review, CMDC Business Financing would make a recommendation to the County EDA for approval or denial. This recommendation would be presented to the County EDA for final determination.
For all projects, the applicant must have loan approval prior to beginning the project. Failure to do so will jeopardize loan fund eligibility.
Nothing in this Policy shall require the Economic Development Authority to make a loan to a business that meets the requirements of the Policy. The EDA is not required to make a loan or provide any financial assistance to a business that meets the requirements of this Policy unless the EDA in its sole discretion determines that it is in the County's interest to make a loan. Each application will be reviewed on a case-by-case basis.
Loan Terms Guidelines
- Minimum amount of loans - $25,000
- Maximum amount of loans - $100,000
- The loan term shall be no less than 3 year and may be negotiated up to 20 years based upon the productive life of the assets.
- Recipients will be charged a $1,500 or 1.5% of the loan amount, whichever is greater, upfront application cost.
- Recipients will be charged a 1% loan origination fee plus all costs associated with the loan, including but not limited to legal and consulting costs that may be incurred by the County EDA in processing the loan application.
- RLF Loan generally shall not exceed 25% of total project costs
- The interest rate will be fixed for up to five years at ½ point below the lowest prime rate published in the Wall Street Journal the day the loan closed. The interest rate will be computed as simple interest and will be fixed for a period not to exceed five years and adjusted for a similar period using the same index and margin. All loans will be structured to fully amortize over the term of the loan. Recipients will be required to set up automatic payments from their checking account for the monthly loan payments under this program.
- Recipients must at all times maintain property insurance on buildings and contents for full replacement value. Insurance policies shall name Sherburne County EDA as a Lender Loss Payee.
- Payments more than 30 days delinquent will be assessed a five (5) percent penalty. Payments first go towards any accrued penalties, then towards accrued interest, and lastly to reduce the balance of the principal.
- No project may commence until the Sherburne County EDA has approved the loan and required local government approvals have been obtained by the Recipient. Any costs incurred before the loan application has been approved are not eligible expenditures.
- The applicant will authorize the Sherburne County EDA to obtain verification of any applicable records, including assets, employment records, and consumer credit reports.
- The applicant is required to submit any/all applicable job reporting requirements and financial statements as required by the Economic Development Authority and as may be periodically requested by County Administration.
Loan Procedures
Prior to releasing funds, the following documentation, and any other documentation required by the County EDA or County Administration, must be in place or provided at the appropriate time during the term of the loan process:
- Notice of Award - The Economic Development Authority must have reviewed and approved a complete application for an eligible Applicant.
- Loan Agreement - A loan agreement shall be executed by the Sherburne County EDA Chair and the principal owner(s) or officer(s) of the business. The agreement must be dated; must state the agreement between the Economic Development Authority and the business; and must specify the amount and terms of the loan funds delivered.
- Loan Security - Any loan made from the Revolving Loan Fund shall be adequately secured to the satisfaction of the Economic Development Authority. Mortgage or lien instruments must be executed at the time of the loan closing. The Sherburne County EDA will take a security interest position in any equipment, real estate or other collateral being financed. Subordinate lien positions loans will be accepted. The County Attorney shall record the instrument and place the original in the project file which is kept in County Administration.
- Amortization Schedule - An amortization schedule shall be prepared by CMDC Business Financing with a copy provided to the borrower. Copies also are retained on file with County Administration.
- Evidence of Permits - Documentation must be proved by the applicant.
- Maintain fire and extended coverage insurance on the project property as required during the term of the loan. Life insurance, Key Man and business interruption insurance may be required.
- Insurance will be required for full replacement value of the property being financed and should not be less than the aggregate balance of the loan(s) used to finance the project.
- Other Documentation - The Applicant may be asked to provide other types of documentation.
Post-Approval of Loan Recipient
In addition to the terms and conditions of the loan, all Recipients must agree to comply with the following:
- To use loan money only to pay the cost of services and materials necessary to complete the project or activity for which the loan funds were awarded.
- To permit inspections by persons authorized by the County EDA of all projects and properties assisted with loan funds. Related project materials shall also be open to inspections which include but may not be limited to, materials, equipment and condition of employment. Requests for inspection shall be complied with by the Recipient.
- To maintain records on the projects as may be requested by the County EDA. These files shall be maintained as long as the loan is active or for at least three (3) years after completion of the work for which the loan has been obtained, whichever is longer.
- The business must maintain an actual physical presence within Sherburne County.
Post Closing and Monitoring
General Procedures:
- When the loan closing is completed and the funds are disbursed, County Administration will establish a loan servicing file to contain:
- All closing documents
- A log of all conversations and correspondence relating to the loan
- A master follow-up file to ensure loan monitoring functions are performed on a timely basis.
- The calculation of principal and interest, and monthly payment reports will be executed at the time of the loan closing by CMDC Business Financing.
- Fund Management services will be provided by CMDC Business Financing. CMDC Business Financing will assist with loan packaging, underwriting and related marketing services for the Fund.
Monitoring
County Administration will be responsible for collecting and maintaining evidence of ongoing compliance with any loan requirements, including job creation and retention, insurance, financial reporting and any special conditions of the original agreement. An annual report of projects financed through this program will be provided to the County EDA and County Board members each year.
The developer/business shall file a report for every year the business/developer receives a benefit under Revolving Loan Policy.
Default
In the event the business is in default on any of the terms and conditions of the loan agreement, all sums due and owing, including penalties, shall, at the Economic Development Authority's option, become due and payable. To exercise this option, the County Attorney shall prepare a written notice to the business. The notice shall specify the following:
- The default
- The action required to cure the default
- A date, not less than (30) days from the date of the notice, by which the default must be secured to avoid foreclosure or other corrective action.
- Any penalties incurred as a result of the default, inability to create job, etc.
The County EDA will determine when and how to collect and liquidate secured collateral in its sole discretion.
Use of Loan Repayments and Reporting
Repaid loans shall be re-deposited in the Revolving Loan Fund Account and used in a manner consistent with these policies and procedures. A separate accounting record for each loan shall be kept to account for all funds loaned.
Download an Application Form (PDF) or request one by writing to the contact address to the upper left. A completed loan application must be submitted to the County Administration Office.